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Corporate Alert: NYSE Expands Requirements for Advance Notice of Material News Announcements…

September 4, 2015

The New York Stock Exchange (NYSE) has amended Section 202.06 of the Listed Company Manual (Manual) primarily to (i) expand the pre-market hours during which listed companies are required to notify the NYSE prior to disseminating material news; and (ii) provide the NYSE with authority to halt trading: (a) at the request of a listed company in advance of a material news announcement during pre-market hours; (b) when the NYSE believes it is necessary to request certain information from listed companies; and (c) when another national or foreign securities exchange halts trading in an NYSE-listed security for regulatory reasons.[1]

Previously, listed companies were required to notify the NYSE (by telephone and through a web-based notification method) at least 10 minutes in advance of releasing material news shortly before the opening of trading on the NYSE or during NYSE market hours (the Material News Policy). Section 202.06 has been amended to expand the period during which the Material News Policy is applicable to between 7:00 a.m. and 4:00 p.m. Eastern Time. Section 202.06 of the Manual has also been amended to request that listed companies refrain from issuing material news during the period from the close of trading (generally 4:00 p.m. Eastern Time) until the earlier of the publication of their security’s official closing price on the NYSE or 15 minutes after the scheduled closing time on the NYSE.

In addition, under the new rules, between 7:00 a.m. and the opening of trading on the NYSE, the NYSE may implement a regulatory halt if: (i) the listed company has informed NYSE staff that it intends to make a public announcement of material news; and (ii) the listed company requests that trading in its listed securities be halted pending dissemination of the public announcement (Pre-Market Halt).[2] Because a Pre-Market Halt will only be instituted at the request of a listed company, the approval of the Floor Governors or Floor Officials will not be required.

The NYSE’s authority to halt trading was formerly limited to situations where a listed company intended to release material news during market hours. In an expansion of this authority, Section 202.06 has been amended to state that trading may be halted if the NYSE believes it is necessary to request information from a listed company relating to: (i) material news; (ii) the listed company’s compliance with NYSE continued listing requirements; or (iii) any other information which is necessary to protect investors and the public interest. The NYSE may continue the trading halt until it has received and evaluated the requested information.

Section 202.06 has also been amended to permit the NYSE to halt trading in an American Depositary Receipt (ADR) or other security listed on the NYSE when the NYSE-listed security (or the security underlying the ADR) is listed on or registered with another national securities exchange or foreign exchange or market and such other exchange (or regulatory authority overseeing such exchange) halts trading in such security for regulatory reasons.

Section 202.06(C) has also been amended to specify the means through which material news should be disseminated: (i) in a Form 8-K or other SEC filing; or (ii) in a press release to the major news wire services, including, at a minimum, Dow Jones & Company Inc., Reuters Economic Services and Bloomberg Business News.[3]

These changes are effective immediately. The SEC’s notice was issued September 2, 2015.

[1] The NYSE noted that the market halt amendments were consistent with Nasdaq rules.

[2] If it appears that dissemination of material news will not be complete prior to the opening of trading on the NYSE at 9:30 a.m., the NYSE may temporarily halt trading solely in its own discretion in order to facilitate an orderly opening process.

[3] To make Sections 202.06(B) and 202.06(C) consistent, the reference in Section 202.06(B) to “Dow Jones, Reuters and Bloomberg” has been replaced with a reference to the “major” news wires. 

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Sara Adler
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Joel I. Greenberg
Senior Corporate Partner
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